Why Retailers Need to Start Thinking More Like Tech Companies

The famous phrase "move fast and break things" has started to fall out of favor in recent years. It has been misinterpreted, misused, and even vilified in the context of well-deserved criticism, but there's something very important that still rings true from it: The idea that nothing is final and there's always room for improvement, and the faster we move toward finding better solutions, the better.

This mentality is very natural to technology companies for many reasons, but especially because technology is endlessly evolving and thus constantly creating change around it. It's rarely the other way around. While society, culture, and even businesses are certainly not static in nature, they don't tend to move as fast as technology, and they usually must adapt to keep up with new possibilities in general, which in turn generate new trends, services, and even industries.

On top of that, tech companies always face a tremendous amount of competition that is not so common in other sectors. One of the most interesting examples of this is that the list of competitors is in constant change as well. As discoveries and developments arrive, tech companies find new streams of revenue and even business models. So, it's not uncommon that a company that did something very different from you last year becomes your direct competitor next year. This, of course, makes planning for the future even more challenging, but it's also a powerful incentive to always be ready to explore new avenues.

The idea of having to adapt or die is strongly exemplified in technology, as there are countless examples of successful companies that started with the idea of developing a particular product or service, but down the line, they shifted to something radically different that does not always resemble the original intent or plan. And that's not necessarily bad.

So, how does any of this apply to retail, if at all? During the last 20 years, the world has seen more change than in the last century, and while that also applies to the retail sector, there are several examples of big retail companies that are desperately holding onto the way things were 20, 30 or even 50 years ago, believing that if something has worked for so long, it's evident that it will keep doing so. But reality says otherwise.

During the — still ongoing — rise of e-commerce, we have seen different companies and industries approach change in different ways. Some managed to thrive, others merely survived, and others just died. In 2022, the idea of a traditional retailer expanding into the e-commerce world is not controversial at all, but it was indeed controversial for many business leaders 20 years ago because they were not willing enough to adapt and change, relying on the consistency of the world they had known for decades.

Now the next step for retailers is rejecting motionlessness and embracing the tech mentality of moving fast. Just getting on board with e-commerce is not enough for retailers anymore, not if they want to thrive and grow.

Retail as a category and concept is unlikely to disappear, but that is not a valid reason to expect success by doing the same thing over and over again. The first lesson to learn from the Move Fast mentality is learning to find solutions, in plural: being willing to take the road of restless change and improvement, not expecting to find the be-all and end-all of solutions that will stay forever. Instead, it's more important to understand that today's challenges will not — and should not — be tomorrow's. Once we reach a solution to a current problem, we need to start preparing to identify what will come next, before it comes to us and we realize it's too late.

In tech companies, this applies very clearly to talent management and the fluidity of roles. If we just found a structure that has recently proved stable and efficient, it's only logical to try to keep it that way for as long as possible. The problem is that there is no guarantee that keeping the same talent doing the same things will make the business model bulletproof. Things will change around before anyone notices, and then it might be too late.

It is very common for tech startups to work under the concept of a temporary organization, which usually happens more out of necessity than anything else. These startups usually don't have enough people, which means that their members are forced to take up new roles constantly. Nevertheless, this creates a culture of flexibility that makes it easier for people to move to different positions in which they won't be afraid to try new things.

These are just a few examples of the many potential improvements that are awaiting retailers who are willing to learn from technology, not just for the sake of novelty, but for the sake of healthy growth. There are many other important angles to be explored, like the constant change in consumer behavior, and how that can be better understood through data analysis, but the first step is understanding that retail does not have to look the same as it has during the last decades, and that the faster we move, the better we will be at adapting.